SBEC Systems (India) Ltd Directors Report.

To,

The Shareholders,

SBEC Systems (India) Limited

Dear Members,

Your Directors take pleasure in presenting the 30th Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2019. FINANCIAL RESULT

THE SUMMARISED FINANCIAL RESULTS OF THE COMPANY FOR THE FINANCIAL YEAR 2018-19 VIS-A-VIS 2017-18 ARE AS UNDER:

(Rs. In Lacs)
PARTICULARS Period Ended 31.03.2019 Period ended 31.03.2018
SALES & OTHER INCOME 84.18 9.28
TOTAL EXPENDITURE 82.71 28.53
OPERATING PROFIT/(LOSS) BEFORE TAX (10.33) (54.65)
PROFIT/(LOSS) AFTER TAX (10.33) (54.65)

During the year under review, the revenue from other income stood at Rs. 84.18 Lacs. The net loss of the Company stood at Rs. 10.33 Lacs as compared to net loss of Rs. 54.65 Lacs for the previous year.

DIVIDEND & RESERVES

In view of the losses incurred, your Board is unable to recommend any dividend for the financial year ended March 31,2019.

The Company has not transferred any amount to the reserves for the year ended March 31,2019.

SHARE CAPITAL

The paid up equity capital as on March 31,2019 was Rs.1000 Lacs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

ASSOCIATE/SUBSIDIARY/JOINT VENTURE COMPANY

As on March 31st 2019, the Company has one Associate Company i.e. SBEC Sugar Limited. Investment in the Associate is dealt with in accordance with Indian Accounting Standard (Ind-AS) 28, the consolidation of accounts of the Company with its associate are combined by using "Equity Method".

Further, a statement containing the salient features of the financial statements of the Associate company are prescribed in AOC-1 and appended as Annexure-A to the Boards Report.

There is no subsidiary company within the meaning of Section 2(87) of the Companies Act, 2013 ("Act").

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company for the financial period 2018-19, are prepared in compliance with applicable provisions of the Companies Act, 2013, Indian Accounting Standards and SEBI (LODR) Regulations, 2015.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions contained in Section 134 (5) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to information and explanations obtained from the management, confirm that:

• in the preparation of the annual accounts for the financial year ended March 31,2019, the applicable accounting standards have been followed and there are no material departures from the same;

• the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2019 and of the loss of the Company for the year ended on that date;

• the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• The Directors have prepared the Annual Accounts on a going concern basis;

• The Directors have laid down proper internal financial controls to be followed by the Company and such controls are adequate and operating effectively and

• The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

DIRECTORS

There was no change in the composition of the Board of Directors of the Company during the financial year 2018-19.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Anupam Bansal (DIN-00004318), Non-Executive Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment.

Mr. Jagan Nath Khurana (DIN: 0003817) who was appointed as Non-Executive Director has resigned from the Directorship w.e.f April 26, 2018.

KEY MANAGERIAL PERSONNEL (KMP)

During the financial period ended 31.03.2019, following persons are Whole Time Key Managerial Personnel (KMP) of the Company in terms of provisions of Section 203 of the Companies Act, 2013.

S.No. Name Designation
1. Mr. Shiv Shanker Agarwal Chief Executive Officer
2. Mr. Luv Gupta* Chief Financial Officer
3. Ms. Priyanka Negi** Company Secretary & Compliance Officer
4. *Mr. Anil Jain Chief Financial Officer
5. **Ms. Akanksha Sharma Company Secretary & Compliance Officer

*Mr. Anil Jain has resigned from the post of Chief Financial Officer of the Company w.e.f. from May 31, 2018 and Mr. Luv Gupta was appointed as the Chief Financial Officer of the Company w.e.f. June 01,2018.

**Ms. Akanksha Sharma has resigned from the post of Company Secretary and Compliance Officer of the Company w.e.f. July 11,2018 and Ms. Priyanka Negi were appointed as the Company Secretary and Compliance officer of the Company w.e.f August 01,2018.

BOARD MEETING

The Board met Five times during the financial year 2018-19, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

COMMITTEES OF THE BOARD

During the year in accordance with the Companies Act, 2013 the Board has re-constituted some of its Committees and presently the Company has following Committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

The details of all the Committees along with their composition, terms of reference and meetings held during the year are provided in the "Report on Corporate Governance" forming part of this Annual Report.

POLICY ON DIRECTORS APPOINTMENT & REMUNERATION AND OTHER DETAILS

The Board on recommendation of the Nomination & Remuneration Committee, has framed a policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters specified under said section. The policy is available on the website of the Company www.sbecsystems.com .

BOARD EVALUATION:

As required under Section 134(3)(p) of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Board of Directors had already approved the evaluation criteria for evaluating the performance of the Board of Directors, its Committees, namely, Audit Committee, Stakeholders Relationship Committee and Nomination and Remuneration Committee, the Directors individually and the performance of Independent Directors.

The manner in which the evaluation was carried out and the process adopted has been mentioned in the Corporate Governance Report.

STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS

As required under Section 149 (7) of the Companies Act, 2013, all the Independent Directors have given declarations that they meet the criteria of independence as specified in Section 149 (6) of the Companies Act, 2013 and SEBI (LODR), Regulations, 2015.

STATUTORY AUDITORS

M/s. Doogar & Associates, Chartered Accounts were appointed as the Statutory Auditors of the Company at the 28th Annual General Meeting held on September 28, 2017 for a term of five consecutive years. As per the provisions of Section 139 of the Companies act, 2013, the appointment of Auditor is required to be ratified by the members at every Annual General Meeting.

The requirement to place the matter relating to appointment of Auditors for ratification by members at every AGM is done away with vide notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, New Delhi. Accordingly, no resolution is proposed for ratification of appointment of Auditors, who were appointed in the Annual General Meeting, held on September 28, 2017.

The report from the Auditors on the financial statements of the Company forms part of this Annual Report.

STATUTORY AUDITORS REPORT

The Statutory Audit Report contains qualifications and the Company has given its comments on Audit Qualified Opinion for the Financial Year 2018-19, the details are mentioned below:

Response to Qualified Opinion

Non reversal of diminution of current quoted investment, it is hereby clarified that the company is holding 1,42,31,214 Equity Shares of SBEC Sugar Limited and the Company is not intending to sale/ transfer/ otherwise dispose off these shares, the management has decided not to make any provision of diminution or reversal thereof.

The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the year under review.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s R.K. Singhal & Associates, Company Secretaries in practice as the Secretarial Auditor to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is given in Annexure-B to this Report.

The observations in secretarial audit report are self-explanatory and therefore not call for any further explanation.

RISK MANAGEMENT POLICY

As required under Section 134(n) of the Companies Act, 2013, the Company has laid down the policy on risk management stating therein the objectives and purpose of the said policy.

The Risk Management Policy of the Company can be viewed on the Companys website www.sbecsvstems.com .

INTERNAL FINANACIAL CONTROLS

The Company has adequate Internal Financial Controls with proper checks to ensure that transactions are properly authorised, recorded and reported apart from safeguarding its assets. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis. The internal auditors of the Company reviews the controls across the key processes and submits reports periodically to the Management and significant observations are also presented to the Audit Committee for review. Follow up mechanism is in place to monitor the implementation of the various recommendations.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES.

Section 135 of the Companies Act, 2013 provides the threshold limit for applicability of the CSR to a Company i.e. (a) net worth of the Company to be Rs. 500 crore or more; or (b) turnover of the company to be Rs. 1,000 crore or more; or (c) net profit of the company to be Rs.5 crore or more. As the Company does not fall under any of the threshold limits given above, the provisions of Section 135 are not applicable to the Company.

RELATED PARTY TRANSACTIONS

The transactions entered with related parties during the year under review were on Arms Length basis and in the ordinary course of business. The provisions of Section 188 of the Companies Act, 2013 are therefore, not attracted. All related party transactions were approved by the Audit Committee and the Board. The relevant information regarding related party transactions has been set out in Note No. 28 of the Financial Statements for the financial year ended 31.03.2019. Thus, disclosure in Form AOC-2 is not required.

As required under Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has formulated a policy on related party transactions and the same was approved by the Audit Committee and the Board of Directors. The said policy has been uploaded at the investors section of the Companys website at www.sbecsvstems.com

CORPORATE GOVERNANCE

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a Corporate Governance Report along with a certificate from M/s R.K. Singhal & Associates, Company Secretaries in practice and Management Discussion and Analysis Report forms part of this Annual Report.

The declaration by the Chief Executive Officer and Chief Financial Officer addressed to the Members of the Company pursuant to Clause D of Schedule V Read with Regulation 34(3) and Chapter IV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding adherence to the Code of Conduct by the Members of the Board and by the Members of the Senior Management Personnel of the Company is also attached to the Corporate Governance report.

VIGIL MECHANISM & WHISTLE BLOWER POLICY

The Company has a vigil mechanism and a whistle blower policy. The same has been posted on the Companys website and the details of the same are given in the Corporate Governance Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure-C to this Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the financial year 2018-19, the Company has not made any investment nor given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule, 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 relating to the ratio of the Remuneration of each Director to the median employees remuneration shall not apply because none of the Directors has drawn any remuneration from the Company for the financial year 2018-19. In terms of the Provisions of Section 197(12) of the Companies act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014. None of the employees of the Company were in receipt of remuneration of more than limit specified as set out in the above said Rules.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Companies Act, 2013, extract of the Annual Return prepared in form MGT 9 pursuant to Rule 12 of the Companies (Management and Administration Rules), 2014 is furnished in Annexure-D which form a part of this report

DEPOSITS

During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

LISTING WITH STOCK EXCHANGES

The Equity Shares of the Company are listed with BSE Limited. The annual fees for the Bombay Stock Exchange have been paid promptly for the year 2018-2019.

SUSPENSION OF SHARES

The Equity shares of the Company are presently lying suspended on the Bombay Stock Exchange due to penal reasons. They were last quoted on the Bombay Stock exchange on 6th September 2001 at Rs. 2.30 per share.

The Company applied for revocation of suspension in trading of securities before "Bombay Stock Exchange" and got in principle approval for revocation vide letter no. LIST/COMP/KK/260/2017-18 dated July 03, 2017. One of the pre-condition required for the approval for revocation of suspension is that entire promoter shareholding shall be under lock-in for a period of 3 months from the date of commencement of trading, post resumption of trading. The Company has provided the Lock-in-certificate of all the promoters to Stock Exchange except one promoter, i.e. SBEC Systems Limited (UK), which holds approx. 20% share capital of the Company. After that, the Company hired a consultant in United Kingdom and requested them to provide the status of the shareholder. On the basis of the information and dissolution certificate, provided by the consultant, it was gathered that the shareholder Company i.e. SBEC Systems Limited (U.K) was dissolved on 19th June, 2001 and the dissolution certificate were also submitted to the Stock Exchange.

The matter is still pending with the Stock Exchange.

SEXUAL HARASSMENT

The company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2018-19:

No. of complaints received : NIL
No. of complaints disposed off : NIL
No. of complaints pending on end of the financial year : NIL

PERSONNEL RELATIONS

Your directors hereby place on record their appreciation for the services rendered by the executives, staff and workers of the Company for their hard work, dedication and commitment. During the year under review, relations between the employees and the management continued to remain cordial.

APPRECIATION

Your directors thank the various Central and State Government Authorities and Agencies for the continued help and cooperation extended by them. The Directors gratefully acknowledge all stakeholders of the Company viz., customers, members, dealers, vendors and banks for their excellent support during the year. The Directors also place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued cooperation to the Company.

For & behalf of the Board
for SBEC Systems (India) Limited
Sd/-
Vijay Kumar Modi
Place: New Delhi Chairman
Date: 14.08.2019 DIN:00004606